Poverty flat in the US, but incomes drop, government says

After three straight years of increases, the number of Americans living below the poverty line remained the same in 2011 versus the prior year, but overall Americans' incomes dropped, according to data released by the Census Bureau Wednesday.

The annual report, which is widely watched for clues about how Americans may be struggling in the post-Great Recession economy, also showed that the number of Americans with health insurance increased in 2011.

The Census Bureau said the official poverty rate in the U.S. was 15.0 percent in 2011, meaning that about 46.2 million people lived in poverty last year, approximately the same as the prior year's record levels.

“At a time when the poverty rate is stuck at a very high level, federal and state governments are broke, politicians are talking about reducing taxes, programs for the elderly are crowding out programs for working-age families, and a struggling middle class is in no position to help those trying to join their ranks. It is very simply a terrible time to be poor,” said Isabel V. Sawhill, senior fellow at left-leaning think tank The Brookings Institution.

For the second year in a row, median household income dropped after accounting for inflation, shedding 1.5 percent to $50,054 from the 2010 median. Families were hardest hit, the government said. Their real median household income fell 1.7 percent, to $62,273.

Overall, wages in American households shrank by 8.1 percent versus 2007, the year before the deepest recession since the Great Depression officially began. Income was 8.9 percent lower than it was in 1999, when wages hit their peak.

The government said that 260.2 million Americans, or 84.3 percent, had health insurance coverage in 2011. That's up from 256.6 million, or 83.7 percent, in 2010. The percentage of people with private health insurance was little changed, and that marked the first time in 10 years that it had not fallen. The percentage of people with government health insurance increased.

The report painted a mixed picture of the economy ahead of the presidential election in November that pits President Barack Obama, a Democrat, against former Mass. Gov. Mitt Romney. Romney has been assailing Obama for his record on the economy, but the president has been countering by asking Americans for more time to fix the economic problems he says he inherited from his predecessor.

Income inequality increased by 1.6 percent between 2010 and 2011. The government measures the gap between rich and poor using the Gini index, a widely accepted measure for studying inequalities in many disciplines. It was the first time that the Gini index had shown an increase in income inequality since 1993, the earliest year for which comparable data was available.

Households that include people who are white or black were harder hit than Hispanic and Asian households, the report said.

The Census also said the biggest declines in household median income were in the West, while other regions of the country weren’t as hard hit.

For women, the income gap remained the same last year vs. the year before. The Census Bureau reported that women who worked full-time, year-round made 77 percent of what men made. But real median wages for both genders declined last year by 2.5 percent.

More Americans were doubling up too, amid the persistent difficulty of starting a new household in the current economy. The Census Bureau reported that shared households, i.e, households that include at least one “additional” adult -- whether it’s an adult child over 18 not in school or an elderly person, etc. – increased to 22.3 million by the spring of 2012. Prior to the start of the recession, those households totaled 19.7 million. The percentage of all shared households rose to 18.4 percent from 17.0 percent.

The number is significant because household formation helps drive the economy. New households can mean homes purchased and then filled with items such as furniture, appliances, autos, and other items.

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